Procedures to be followed in the event a public entity takes-over of a private enterprise

Procedures to be followed in the event a public entity takes-over of a private enterprise
Auguste v NYC Health and Hospitals Corp., 271 AD2d 215 [Appeals on Constitutional grounds dismissed, 95 NY2d 930, motion for leave to appeal denied, 96 NY2d 704]

Section 45 of the Civil Service Law sets out the rights of the employees of a private sector employer in the event the State or a municipality takes over the private entity. However, sometime special legislation addressing a specific takeover situation is adopted. Section 7390 of the Unconsolidated Law is an example of such special legislation.

Section 7390 was enacted in the early 1970s in response to the New York City Health and Hospital Corporation’s [HHC] decision to take over many of the functions then being performed by a number of voluntary hospitals. This change was expected to have an impact on several thousand workers. In particular, Section 7390(2) gave civil service status to the employees affected by HHC’s reorganization changes under certain conditions.

The Appellate Division in deciding the Auguste case ruled the provisions of Section 7390(2) applied in a takeover situation that occurred some 30 years after the statute was enacted.

Gislaine Auguste, a Senior Medical Laboratory Technologist at Lincoln Hospital, was an employee of New York Medical College [NYMC]. NYMC provided Lincoln with pathology services under an affiliate agreement with HHC. When HHC decided not to renew its affiliation agreement with NYMC in 1997, Auguste found herself without a job.

Arguing that her position at Lincoln was transferred rather than abolished, Auguste sued. Her theory: she had a statutory right under Section 7390(2) to continued employment based on her seniority and her status with NYMC and other affiliate employers. The Appellate Division agreed and directed HHC to reinstate her with back salary.*

Auguste’s basic argument: The 13 new positions were civil service positions with duties similar to those of her former position with NYMC and she had civil service status without having to qualify by examination pursuant to Section 7390(2).

Auguste, who had 32 years of service to her credit at the time she was terminated, apparently was employed by an HHC affiliate when Section 7390 was enacted. Although she was not affected by the administrative changes HHC actually made during the 1970s, this employment presumably gave her a vested right to the benefits granted employees of HHC affiliates by Section 7390 so long as she continued in uninterrupted service with HHC affiliates.

The Appellate Division specifically rejected HHC’s contention that Section 7390 was intended to apply only to the staffing changes resulting from its 1970s reorganization plan.

Citing Butler v New York City Health and Hospitals Corp., 82 AD2d 136, the Appellate Division held Section 7390:

1. Gave civil service status to former employees of a voluntary hospital whose functions were transferred to an HHC affiliate; and

2. Specifically provides that employees of voluntary hospitals providing services that are assumed by HHC shall be transferred to HHC.

The bottom line: the court said that Section 7390, although enacted to address situations arising in the 1970s, was not limited to that specific period but operates to continue affected employees in their employment in similar or corresponding positions as HHC employees, including individuals affected by the non-renewal of the HHC-NYMC affiliation agreement in 1997.

Accordingly, Auguste continued to be protected by Section 7390 when her employment by an HHC affiliate was discontinued through no fault of her own some 30 years later.

* Eleven former Lincoln/NYMC pathology department employees, together with two new employees, were appointed to new HHC positions of Associate Laboratory Microbiologist.
.

Tenure by estoppel

Tenure by estoppel
Matter of Ronga v Klein, 2011 NY Slip Op 01408, Appellate Division, First Department

A probationary administrator or teacher may attain tenure by estoppel [sometimes referred to as “tenure by acquiescence”] when a school board accepts the continued services of a teacher or administrator, but fails to take the action required by law to either grant or deny the individual tenure prior to the expiration of the administrator’s or teacher’s probationary term, McManus v Hempstead Union Free School District, 87 NY2d 183.

Richard Ronga, appointed as a probationary principal by the New York City Department of Education [DOE], challenged DOE's terminating his employment on the theory that he was denied due process as he was not give the required pre-termination notice and hearing.

Ronga contended that he had attained tenure as a principal by “estoppel” and thus he was entitled to such due process as a matter of law.

Supreme Court dismissed Ronga’s petition, which ruling was unanimously affirmed by the Appellate Division.

In contrast to Ronga’s claim that he acquired tenure by estoppel, the Appellate Division said that the record established that he did not perform the duties of a principal with DOE's knowledge or consent beyond the expiration of his probationary term.

Further, the court noted, prior to the expiration of Ronga’s probationary period DOE notified him that he would not be granted tenure. According to the decision, Ronga and DOE then negotiated and signed a resignation agreement, which Ronga attempted to revoke later that same day.

The Appellate Division concluded that Ronga failed to demonstrate that he acquired tenure by estoppel and, further, failed to sustain his burden of showing that DOE acted in bad faith when it terminated his employment as a probationary principal, “as he provides no support for his claims.”

N.B. Continuation on the payroll for a brief period after the expiration of a probationary period does not automatically result in the individual attaining tenure by estoppel [Mendez v Valenti, 101 AD2d 612]. The court ruled that as long as the termination of a probationer [in the classified service] is effected within a reasonable time, such as set to coincide with the end of the next payroll period, the courts will not deem the probationer to have obtained tenure by estoppel because of his or her continuation on the payroll following the last day of his or her probationary period.

The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2011/2011_01408.htm
.

Declining to reveal “sensitive family information” held mitigating circumstances sufficient to justify recommending a less severe disciplinary penalty

Declining to reveal “sensitive family information” held mitigating circumstances sufficient to justify recommending a less severe disciplinary penalty
Department of Sanitation v Anonymous, OATH Index #181/11

An employee admitted she was absent without leave for almost one year.

In mitigation, the employee testified regarding personal and health problems and said that she did not request leave because she would have to reveal sensitive information about her family, and was afraid it would not be kept confidential.

OATH Administrative Law Judge Faye Lewis found that although leave would have been granted had the employee properly requested it, Anonymous could be disciplined for taking absence without leave.

In consideration of extraordinary mitigating circumstances, however, ALJ Lewis recommended a sixty-day suspension without pay, which recommendation the appointing authority adopted.

The decision is posted on the Internet at:
http://archive.citylaw.org/oath/11_Cases/11-181.pdf
.

Agency's failing to appear at an administrative hearing may have adverse consequences

Failing to appear at an administrative hearing may have adverse consequences
Aures v Buffalo Board of Education, 272 AD2d 664

The Aures decision demonstrates the problem that could result if a party fails to appear at an administrative hearing as scheduled -- the hearing officer may hold the hearing in absentia and the determination will be binding on the parties.

Although it had not participated in the administrative hearing, the Buffalo Board of Education [Buffalo] attempted to overturn a determination by an Unemployment Insurance Administrative Law Judge [ALJ] holding that Karen M. Aures was eligible for unemployment insurance benefits.

Aures, one of number of temporary teachers employed during academic 1996-1997, had applied for unemployment insurance benefits at the end of the school year. The local office of the Division of Unemployment Insurance found that Aures had received reasonable assurances of continued employment for the next academic year and disapproved her application for benefits. Aures appealed.

The key to a teacher’s eligibility for unemployment insurance between school years depends on his or her receiving a reasonable assurance of reemployment for the next school year within the meaning of Section 590(10) of the Labor Law.

An administrative hearing was scheduled but Buffalo failed to appear at the hearing. The Administrative Law Judge [ALJ] elected to proceed to hold the hearing notwithstanding Buffalo’s absence. The bottom line: the ALJ overruled the initial determination, holding Aures was eligible to receive benefits.

When Buffalo learned of the decision, it asked the ALJ to reopen the case. The ALJ denied Buffalo’s motion and the Unemployment Insurance Appeals Board [Board] affirmed the ALJ’s ruling. Buffalo subsequently asked the Board to reconsider its decision concerning Buffalo’s motion to reopen the matter. The Board agreed to do so, but ultimately decided to adhere to its previous ruling that sustained the ALJ’s determination denying Buffalo’s request to reopen the hearing. Buffalo appealed.

Why didn’t had Buffalo appear at the hearing before the ALJ? According to the court, Buffalo’s excuse for its not appearing at the hearing as scheduled: the unavailability of certain key witnesses.

The Appellate Division was not impressed by this argument. Noting that the key witnesses in question were under Buffalo’s control, the court said that “[h]aving elected to assign such witnesses to their regular duties rather than directing them to attend the scheduled hearings, [Buffalo] cannot now be heard to complain.”

The court affirmed the Board’s rejection of Buffalo’s motion to reopen the matter, explaining that the decision to grant an application to reopen lies within the discretion of the Board.

Unless it can be shown that the Board abused its discretion, the Board’s decision will not be disturbed by the courts. The Appellate Division decided that the record supported a finding that Board had not abused its discretion and dismissed Buffalo’s appeal.
.

Probationary employee challenging his or her termination must show bad faith or an improper or impermissible reason underlies the termination

Probationary employee challenging his or her termination must show bad faith or an improper or impermissible reason underlies the termination
Matter of Mathis v New York State Dept. of Correctional Servs., 2011 NY Slip Op 01190, Appellate Division, Fourth Department

Probationary correction officer Demar Mathis filed an Article 78 petition challenging his termination from his employment for “failure to complete his probationary period in a satisfactory manner.”

Supreme Court granted Mathis’ petition, annulled the appointing authority's determination and reinstated him to in his former position with back pay. Although Supreme Court thereafter granted the Correction Department’s motion to reargue its opposition to Mathis’ petition, it ultimately adhered to its prior decision.

The Department appealed and the Appellate Division overturned Supreme Court’s ruling.

First, the Appellate Division said that it agreed with the Department’s argument that at the time of his termination, Mathis was a probationary employee who could be terminated for “almost any reason or for no reason at all," citing Matter of Swinton v Safir, 93 NY2d 758.

It then noted that although Mathis’ probationary term was to expire on October 29, 2007, it was extended by 92 days in accordance with the provisions set out in 4 NYCRR 4.5(g) in the event a probationer is absent during his or her probationary period.*

The Appellate Division said that Supreme Court erred when it concluded that Mathis was no longer a probationary employee on the date he was terminated because Supreme Court calculated the extension required by 4 NYCRR 4.5(g) using calendar days rather than workdays.

In the words of the Appellate Division, “Where, as here, a probationary term is extended pursuant to 4 NYCRR 4.5 (g), the extension is "one workday for every workday" the employee has missed.”

The Appellate Division than opined that "As a probationary employee, [Mathis] had no right to challenge the termination by way of a hearing or otherwise, absent a showing that he was dismissed in bad faith or for an improper or impermissible reason." Mathis, said the court, made no such showing here and that the record indicated that he had excessive absenteeism, disobeyed a direct order to return to work and continued to have absenteeism problems after being counseled about his absenteeism.

The court agreed with the Department that "[c]hronic absenteeism is a sufficient basis for terminating a probationary employee" as is the refusal to comply with a direct order.”

* 4 NYCRR 4.5(g), in pertinent part, provides that with respect to absence during probationary term, Any periods of authorized or unauthorized absence aggregating up to 10 workdays during the probationary term, or aggregating up to 20 workdays if the probationary term or maximum term exceeds 26 weeks, may, in the discretion of the appointing authority, be considered as time served in the probationary term. … Any such periods of absence not so considered by the appointing authority as time served in the probationary term, and any periods of absence in excess of periods considered by the appointing authority as time served in the probationary term pursuant to this subdivision, shall not be counted as time served in the probationary term. The minimum and maximum periods of the probationary term of any employee shall be extended by the number of workdays of his absence which, pursuant to this subdivision, are not counted as time served in the probationary term.

The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2011/2011_01190.htm
.